50 Three-word phrases that can make your start-up a success

(Editor’s note: Dharmesh Shah is a serial software entrepreneur and the founder and CTO of HubSpot, which provides marketing software for small businesses. This column originally appeared on his blog. )

For some reason, I like wordsmithing and trying to make phrases smaller (while still retaining some meaning).  Not long ago, when I was up much too late, I tried to come up with some of my best startup advice and see if I could reduce it down to exactly three words.

One thing led to another, and I became obsessed with it. So obsessed, in fact, that I had put together 47 before I was able to make myself stop.  While it’s likely not the most brilliant startup advice you’ve ever read – it has a decent chance of being the shortest.

Startup Triplets:  Startup Advice In Exactly Three Words

1.  Watch your cash.

2.  Pick founders carefully.

3.  Hire generalists early.

4.  Hire specialists later.

5. Invest in culture.

6. Avoid tempting distractions.

7.  Support customers maniacally.

8.  Avoid business plans.

9.  Write a blog.

10. Never fudge numbers.

11. Encourage diverse thinking.

12. Guard your time.

13.  Defer renting space.

14. Get enough sleep.

15.  Delay raising capital.

16.  Persist through downturns.

17.  Decide with data.

18.  Improve product daily.

19. Recognize revenue consistently.

20. Start charging early.

21. Reward early adopters.

22. Sell something today.

23. Say “NO” often.

24. Accept imperfect data.

25.  Recruit with zest.

26. Nurture your best.

27.  Treat vendors well.

28. Believe in yourself.

29. Respect your competitors.

30. Try something new.

31. Build a brand.

32. Focus, focus, focus.

33. Iterate more often.

34. Use your product.

35. Live your vision.

36. Encourage rational debate.

37. Make decisions swiftly.

38. Face harsh realities.

39. Don’t break laws.

40. Protect your health.

41. Celebrate your successes.

42. Cancel unnecessary meetings.

43. Improve employee’s resumes.

44. Beware big bullies.

45. Share the experience.

46. Maintain your relationships.

47. Keep it fun.

Note: After I originally posted this list, Guy Kawasaki (yes, the Guy Kawasaki) was kind enough to post some of his own triplets. Here are a few of them:

48. Sales fixes everything.

49. Ship then test.

50. Do not partner.

You can see his full list here: Guy Kawasaki’s Startup Triplets.

You’re way smarter than I am – and I’d love to see your own startup triplets. Share them in the comments below or post it to twitter (with hashtag #StartupTriplets).  I think you’ll find it fun – and addicting.

Example of Embracing Mass Customization

I am very fascinated with LEGO Factory, a website enabling users to download a program with which you can build virtual 3D LEGO models and upload them to ‘LEGO Gallery’ and display them for the online LEGO community. The user and other users can purchase the ‘kit’ (i.e. the LEGO pieces necessary to build the model) and then build the model in real life. When the user purchases his own model it is mass customization, but by making the model mavailable online for purchase by other users, LEGO proposes a new business model.

When the user purchases his own model it is mass customization, but by making the model mavailable online for purchase by other users, LEGO proposes a new business model.

LEGO Factory is a hit with customers and enthusiasts, and LEGO is harnessing several thousand customers’ ideas and input to develop new products and models.

LEGO brought us Mindstorms and Mindstorms NXT and were reasonably quick to adapt their licensing and business models to support users’ desires to hack and modify the system. Initially, LEGO restricted hacking and considered (and perhaps even did send¹ ) cease-and-desist letters to users publishing their hacks.

After a while, however, LEGO chose to embrace their customers and their hacks and released an API and SDK. Now, Mindstorms is a fantastic platform for techies around the world to experiment with their computers and LEGO kits - e.g. for building robots to play connect four and Rubrik Cube solvers.

Now, LEGO is working on the LEGO Universe, a MMOG² platform for creating games in the LEGO universe, i.e. with LEGO building blocks and characters. This is a very interesting new approach and business model, which could be LEGO’s new block buster and, in any case, will definitely provide highly useful experience for the company. It will be interesting to follow the development of this new initiative.

1. Does anyone know how far LEGO went with this? [↩]
2. massively multiplayer online game [↩]

A Different Approach to Layoffs

Lots of companies are downsizing and laying off substantial parts of their work forces - even among the most “secure” and “respected” companies, things are changing very rapidly.

Recently I learned about a 2.500 people company having to cut 10%. This was achieved by going through each division, department, section, and team and picking out 10% of the employees. One the day it was done, the atmosphere was horrible - everybody was scared of being picked and no-one (except management) really knew what was going on. The deed is done and life goes on for the company and the (ex-)employees.

Might there be a different approach to the layoffs? Cost cutting is (probably) necessary in most cases, but does cost cutting have to equal cutting staff?

..does cost cutting have to equal cutting staff (..) might it be possible to cut 10% of wages instead?

Over the past years we have experienced an economic boom with increasing everything - food prices, house prices, gas prices … and salaries. A lot of these increased prices are on the way back down again (houses, gas, food, etc), but salaries seem to stay up there - once you have a certain monthly salary, it is not likely to decrease.

In a situation where a company has to cut 10% of (employee) costs, might it then be possible to cut 10% of wages instead? Imagine a really committed and tight-knit team with a engaged, caring, and conscientious head - could he “sell” such an idea to his team?

For the company, it makes sense to lower salaries instead of laying off. You achieve the necessary cost cuts while maintaining your staff - and thereby all the skills, abilities, and resources you have painstakingly gathered and trained. You don’t drop any projects or ideas on the floor and operations and developments are not interrupted.

It also makes sense for the team: You maintain cohesion and the (hopefully) positive atmosphere, and things can proceed uninterrupted, and possibly even with more energy, urgency, and efficiency than before.

For the individual team member, i.e. one of those potentially layed off, it is a matter of taking a known pay cut versus taking the chance of being layed off. Is there a term for this from game theory? Not a exactly a prisoners dilemma, but possibly related (as you can tell, I do not know much about game theory). If you are part of a good team and like your colleagues, and with the above mentioned wage increases, you might chose the pay cut.

This different approach does not have to be applied across the company. The company might let the individual manager decide which model to chose for his or her team. Or, you might even combine layoff with salary decreases (e.g. layoff 5% and have the remainder take a 5% salary cut). In any case, the idea might be worth considering.